Friday, February 29, 2008

Little Emperors

All roads lead to Beijing this August. As China gears up to showcase its mettle at the 2008 Olympic Games, marketers are salivating at the thought of how to make hay, while players sweat it out in the sun!

“13” may not be considered a lucky number for some, but July 13, 2001 has turned out to be a lucky date for marketers worldwide. On this day, Beijing celebrated being awarded the 2008 Olympic Games. With the games just round the corner now, both marketers and media are going into frenzy. It is a great moment for China and marketers everywhere. It is also China’s way of showcasing to the world what it really is.

Pride of China

“Olympics-in-Beijing” is a unique combination and is breaking all records. First, China won the bid with flying colours garnering 56 votes, compared to 22 for Toronto, 18 for Paris and 9 for Istanbul. This was possible because of “a combination of good sports concept with complete government support.” For the Chinese, it is one of the “first real reasons for a celebration after many years!” Second, a record number of 54 sponsors have associated themselves with the game, and more are expected to join in. Olympics is the greatest sporting event of the world and this year it is going to be hosted by the largest economy of the world. This could turn out to be the biggest Olympic Games ever. “There are going to be 4.5 billion viewers looking at Beijing & China with amazement,” says Brian Perkins, VP of Johnson & Johnson (J&J), after signing the sponsorship deal for the Beijing Olympics. Come to think of it, J&J never bothered about being an Olympic sponsor before this!

Nearly 1.3 billion consumers & GDP growth of 11% last year, China’s economy is red-hot and has marketers salivating at the thought of this opportunity to target China’s huge middle class. Those who had once kept away from the event, are finding it the best place to put their moolah in now.

One Game One Dream

China has coined the logo for the game, “One World One Dream,” which is expected to draw 8,00,000 foreign visitors and one million domestic visitors of Beijing, and also hoards of foreign brands. This is one opportunity nobody wants to miss. GE has already launched an Olympic-themed billboard campaign in China. McDonald’s is using this opportunity to expand its outlets in China from 750 to 1000 units. For Lenovo, the world’s No.3 PC maker, China is its home market and Olympics – a huge opportunity. So its launched a unique limited-edition notebook PC, which would feature its winning design for the Olympic torch. This design of the torch for the Olympics was chosen out of 300 submissions and was a moment of great pride for Lenovo. This was their way of establishing that they were among the best designers – and that too on the world stage. Lu Ning, one of China’s sportswear retailers is planning to open more stores. In fact, the sporting goods market of China is expected to grow by over 23% this year. Adidas expects its China sales to exceed ¤1 billion by 2010.

Sintex Industries, the largest plastic manufacturer in India, would be chipping in too. Together with PolyJohn International, they would supply the Beijing Olympics with portable toilets. China happens to be Coke’s fourth largest market and is going berserk this time. When Beijing was awarded the games in 2001, Coca Cola’s Beijing plant came out with 30,000 golden covered bottles which read “Our Congratulations on the Olympics.” It was also the first authorised user of the Beijing Olympics logo. It has even designed a new Coke bottle and logo just for the games, using Chinese design elements like clouds and kites. Not surprising then, that in the increasingly crowded Chinese market where standing out is becoming a problem, Coca-Cola was voted by the Chinese people as the most popular Olympic sponsor of the year.

Volkswagen China Group put in $100 million in cash and kind to win the bid in the hotly contested car category. Hyatt and JW Marriott are opening hotels in Beijing. Everybody even remotely connected with the games is flocking to China. A survey done by the US-China Business Council found that 83 of the 100 US firms were profitable last year in China. It pays to come to China, and this time – what a dream destination it will be for companies & customers alike.

Ambush Marketing

Advertising at the Olympics is not going to come cheap. To become an official sponsor or even to advertise on TV you would need deep pockets. China Central Television reportedly has collected $10 billion in biddings for advertising slots during the games. Air China has paid $5 million for one of the top slots (for August). Analysts predict that as much as $5 billion would be spent on advertisements and TV show sponsorships.

A study shows that 68% of Chinese sports fans were more likely to buy brands that sponsor the Olympic Games than those that don’t. No wonder deep pockets or not, a whole lot of companies would find innovative ways to ingeniously associate themselves with the event. Nike, not an official sponsor of the game (Adidas is the official sponsor), is an expert in ambush marketing. In 1996, it set up a “Nike Village” just near the Atlanta Olympic Village and with its slogan, “Stone’s throw away” strategically placed around the main stadiums, grabbed the spotlight from Adidas. In 2000 Sydney Olympics, Qantas Airlines used the slogan “The Sprit of Australia,” which sounded similar to the Game’s slogan, “Share the Spirit.” This time Nike used Liu Xiang, one of China’s biggest sports celebrity. When he broke the world record in a competition, Nike made him a T-shirt featuring his 12:88 second time. He wore thes T-shirt as he stepped off the plane when he reached home.

Nike is today perceived as the company most associated with Olympics. Li Ning (sports clothing) and Mengniu (dairy products) are two other companies voted as the most popular Olympic sponsors in China. None of them is actually a sponsor!

Whether you become the official sponsor of the “Game” or not, whether you have the money to showcase your ad on TV during August when the games will be played, it’s time to get thinking. It’s time for some intelligent marketing & advertising ideas. This time China, once a third world country, is going to stand proudly wearing the Olympic crown, proving to the world that it can give competition to super-powers like USA. It’s going all out to make the most of this opportunity. China will spend $200 billion on the games this year.

The Olympics would give a boost of $3 billion to the global advertising world. Some 300 million people would be watching key programmes in China. If there is one country you should be in – it’s China. This is your chance to make a place for your brand in this growing market.

Look at it this way, with more than 100 million customers in the age group of 18-28, what better market could companies ask for. It’s the right target audience for a whole lot of companies. So start working on your strategies. Do all you can to attract millions of these young affluent customers – these little emperors!

Friday, February 15, 2008



This year the Golden Globes cancelled its televised awards show due to lack of movie star participation. Early January this year, the Screen Actors Guild announced that 70 actors short-listed for the awards would not attend the ceremony to show their sympathy with scriptwriters, who have been on strike for over two months.

If things are not set right and the scriptwriters’ voices are not heard, then next in line of fire would be the Oscars, and none other than the famous and one of Hollywood’s most powerful stars George Clooney is backing this boycott. Scheduled for Feb 24th at the Kodak Theater in Hollywood, the award ceremony could well turn out to be a damp squib if the strike by the Writers Guild Association (WGA) continues. The cancellation of the Golden Globes reportedly cost broadcaster NBC $20 million in lost advertising revenue. The question on everyone’s mind is would the strike that hobbled the Globes also cripple the Oscars?

Back in India, the 13th Calcutta Film Festival was boycotted by a whole lot of celebrities. A whole lot of other people too gave Nandan (where the festival is held in Kolkata) a miss for Nandigram. It was their way of protesting against the inhuman killings in Nandigram. So, what is it indeed that makes boycotts so popular?

Boycotts have immense persuasive power

Author Bob Burg says “When businesses – even the most powerful ones – offer terrible customer service, mistreat their workers or take unfair advantage of consumers there is a way to influence them to mend their ways.”

In fact, boycotts are not new to India. Mahatama Gandhi used them to help him win his war of independence for India.

Boycotts have the power to get international attention. They are a non-violent way of protesting against anything going wrong. Whenever people have been pushed to extremes, boycotts have happened. In India, people boycotted the fine cloth produced in Manchester & turned to home-spun cloth. They boycotted salt produced in factories, when the British introduced a new tax and took to collecting salt from seashores. Even today, the power of boycotts cannot be denied.

They are red, sometimes more expensive than even diamonds, sometimes referred to as “pigeon blood” and sometimes even responsible for the bloody end of many young people. Rubies from Burma. Critics call them “blood rubies” for they are mined under extremely unsafe conditions where a lot of labourers get killed too. Worst of all, the money is used to fund the harsh policies of the military government. Burmese rubies account for 90% of the world’s supply. Through periodic auctions of its top quality gems, Burma generates a lot of foreign exchange. In 2006, the gems firms generated 300 million dollars in sales. However last November, some big western firms shunned Burmese gems. Italy’s Bulgari, France’s Cartier, and American Jewellers Tiffany & Company and Leber Jeweller Inc. – all have decided to not use rubies from Burma and try to weaken the financial position of the military government there.

If that was not enough, a new campaign “I am not going to Burma” was launched to help Aung San Sui Kyi bring back democracy in Burma. Her party won 82% of the seats in the 1990 elections but the Junta regime refused to hand over power and instead imprisoned and tortured members of her party and put her under house arrest. From Tony Blair to a whole lot of other celebrities, everyone joined the Boycott-Burma-campaign, to stop the funds from tourism to fill up the pockets of the brutal Junta government.

Politics and business are always closely related and not just tourists, but a whole lot of companies doing business in Burma were convinced and sometimes even forced to close down. “The consumer is the king” could not have been proved more correct and consumer activism never more successful as in the case of lingerie manufacturer Triumph. An advertisement was published, which showed a model wearing a barbed wire bra under which ran the slogan “support breasts not dictators.” Customer complaints started increasing and many women went back to Selfridges (the top-end department store in London) to return their lingerie. Within two months Triumph was out of Burma.

Business of boycotts

What’s a boycott? It’s a way of voting with our wallets. It’s a way of telling organisations or countries or groups to stop their unethical practices if they want the ‘money’ votes.

Boycotts are becoming the new weapons in business. NGO’s and activist groups are turning more & more sophisticated in their approach. They are now staging highly dramatic activities. Business leaders are getting concerned about these boycotts, as they are turning into “most effective techniques for the consumer movement to use.”

After being boycotted for fishing policies that were harming dolphins, even Heinz agreed to a dolphin protection plan.

A leader in the South African market, Barclays Bank gave up its position and pulled out of the country when an anti-apartheid boycott campaign saw its share of the UK student market plummet. Half the students holding accounts with Barclays Bank withdrew their accounts.

When Shell Oil Company decided to dispose off an old oil drill rig named Brent Spar by sinking it in the North Sea, it faced a series of boycotts of its petrol stations all over Europe. In spite of being backed by the British government, the company had to eventually abandon its plan.

Carpet makers in India, Nepal and Pakistan were singled out by the western press and severely criticised for “employing” children at the cost of their health, education & childhood. It resulted in the creation of “Rugmark” label, which stood for hand-knotted carpets which were not made by employing child labour.

Exxon Mobil, one of the world’s largest oil corporations, opposed moves to combat global warming and as a result faced tremendous wrath of the people. The boycott was backed by celebrities like Annie Lennox, Bianca Jagger and Anita Roddick.

Ethics – the vital question

Today, consumers do have the power to bring down businesses to their knees. Today, more than ever before, people can be united easily – thanks to the Internet and free flow of information. People, especially youngsters, are getting more and more informed. It is these customers who initiate most of the boycotts and make them successful. They boycotted Adidas for using Kangaroo skin in the boots. These informed educated people urged everyone to boycott Gap if it did not stop its unethical practices. It accused Starbucks of selling overpriced coffee and not giving back to the farmers who grew the coffee in poor starved countries like Ethiopia their due. It’s these people who are asking for a boycott of Barclays for financing the Narmada Dam in India, which would flood one of India’s most productive agricultural regions and forcibly displace two million people.

The consumer is changing. Traditional purchasing behaviour is changing. He is no more looking for just a good bargain, but is concerned about how the product is made too. Ethical consumerism is on the rise and a boycott is his most powerful weapon. It’s easy to organise a unified protest aided by the Internet. Boycotts in the past have changed history forever… and they can do so now as well… maybe even more easily with the help of the virtual army.

So business houses need to be careful, for today’s consumer can really hurt their finances, profits, share prices and peace of mind. He has the power to hit where it hurts.

Friday, February 1, 2008

Bug to the nano

Tata Nano has truly scored on pricing & features. But if automotive history is anything to go by, it would need an exceptionally innovative advertising strategy to sustain

In 1931, Dr. Porsche designed a small car in Stuttgart, Germany. Hitler had ordered the best cars to be made ready for the 1938 car exhibition in Berlin. He specified that the cars be small, inexpensive and fast – suitable for the new roads being built in Germany. It was exactly seven decades ago that the car appeared on German roads. This car was later on launched in America, which was recovering from the war and rebuilding its consumer society. This car from Germany, which looked like an orthopaedic boot designed by Hitler, could not have come to America at a worse time. No one wanted anything associated with Hitler. Then the pied piper of creativity appeared, and did miracles for the car. This man knew the people were ready & waiting for something to get excited about. Someone needed to show them how. He created an advertisement for the car, which is considered by many as the best in the history of advertising. While all other cars were showcased in lush settings with beautiful models, here stood a tiny car – unadorned, untouched – in black and white. A simple headline of two words “Think Small” and the Beetle became the new symbol of a whole generation. The man – William Bernbach – had created an icon.

A few days back, when Ratan Tata unveiled the Nano and gave the world its first Rs.1 lakh car, he once again fired the imagination of the automotive industry the world over. “A promise is a promise,” said Ratan Tata, at the launch of the world’s cheapest car. However, a great car is more than just price and features. It’s all about creating an impact. Yes, the “Nano” with its unbelievable pricing, has succeeded in creating a buzz, but great advertising and positioning is what is going to help it sustain in this extremely competitive area. A whole lot of small and midsize car manufacturers are already queuing up with their wares on the Indian shores. Those here are reworking their prices too. Maruti 800 will soon offer its basic version at Rs.1.8 lakhs (ex-showroom price). The Beetle, Volkswagen’s iconic car is going the hit the Indian roads too, sometime in May this year. We do hope Nano has some great ideas stashed up, to help it stay ahead.

Marketing miracle

Yes, it was a marketing and advertising miracle that made the Beetle a symbol of the 1960’s “flower generation.” It used the same theme (albeit after a little modification) to relaunch the car in 1970’s and 80’s. “Ugly but it gets you there,” won the Beetle a 15% market share. O&M devised a marketing strategy on the concept, “Isn’t that what you’d expect from a VW” and created a powerful branding around the VW family.

In March 1998, when Volkswagen started marketing the New Beetle, its advertising campaign aimed at helping people connect to a happier past of the 1960’s.The commercial entitled “Soul” promised that “If you sold your soul in the 80’s here’s your chance to buy it back” and the commercial entitled “flower” simply declared “less flower, more power.” A heavy dose of nostalgia, which worked well for the Beetle.

Car buying has got a lot to do with perception and image. Car makers are working hard to portray the right image of their cars and make them more compatible and more “today.” Toyota, for long, has been known as the dependable one. It now wants to shake-off that image & become more sporty and sexy. Honda’s conservatism doesn’t seem to work well anymore. It’s trying to become more adventurous. Jaguar needed new designing or else it would have become a nostalgic brand. Mercedes is trying hard but it still lacks the glamour of a Bentley. Times are changing and automakers need to change too, if they want to remain in the race.

Perception – the key to success

It’s all about communicating – and communicating well. The one car that seems to have mastered the art is Ford. According to a survey done in America, 16% of teenagers wanted a Ford for their first car – the highest percentage compared to other makes. They may have ranked a Merc or a Lexus as the best, but Ford had very successfully convinced them and their parents that this was the most solid, reliable & above all affordable car for the teenagers.

Perceptions play an important role in influencing customer purchase behaviour. Korea’s Hyundai entered the US market with cars that were plagued with problems. Chinese cars, too, face the same problem of being perceived as not being up to the mark in terms of safety & reliability. However, a sole Chinese automaker displayed his silver sedan bang outside the main showroom of Detroit’s Auto Show, sending a signal to the world that Chinese cars are as good as the best in the market. Chrysler is perceived as a company that makes great looking vehicles, but is behind competition in terms of technology & quality. To change this, it changed its tagline to “Engineered Beautifully”, with the television commercials showing all the technological innovations.

The Camry, on the other hand, has been the best selling sedan in the United States for the past eight or nine years. It’s perceived as the most reliable car, making every car manufacturer aim directly at it. GM has come out with a drastically restyled Chevrolet Malibu, pitching it directly against Camry. Honda, Chrysler too are making sedans to attack Camry’s market.

Advertising can change perceptions, create new perceptions and the one who advertises intelligently scores. Not surprising then, that Toyota, the market leader, accounts for 30% of the total ad-spend by vehicle manufacturers, and in return, rules 25% of the new car market. Performance and features are surely strong selling points, but you can’t ever doubt the impact of advertising.

New ways new times

Times are changing, consumers and their buying habits and patterns are changing too. With a plethora of new models in the market, the generic benefits like fuel efficiency etc., hardly claim to be distinguishing factors between car models. It’s advertising that provides the differentiation and positions the cars. The “Josh Machine” gave Ford Ikon a unique positioning. Santro entered the market by positioning itself as the family car. Then it evolved into the “Sunshine Car.” It used the “Sunshine-Bollywood-stars” Shah Rukh & Preity Zinta to make the car more young & glamorous. Maruti’s “Count on us” slogan gave it the tag of “Mr. Dependable.”

Not just advertisements, you need to constantly innovate your marketing strategies to stay in-sync with the times. Mahindra and Mahindra unveiled its four-wheel drive vehicle, the Quadro, which could be booked on the Internet. Targeted at the up-market, young-at-heart clientele, the Quadro could be customised on the net, where one could select accessories etc.

Movies for long have worked wonderfully in building and promoting car brands. Remember movies like Love Bug, and the more recent one Herbie: Fully Loaded, which had the Beetle as the hero of the films, making it more popular & likeable. The movie Road helped re-launch Tata Safari. Ta Ra Rum Pum was probably a movie made to promote brands. Goodyear, General Motors and Castrol all starred in the forgettable film. So marketing of cars is getting more & more exciting.

A car is today a way of expressing who you are and advertisements today play a very important role in helping build the right image. The spanking new “Nano” needs to build its image very carefully. This is one of the strongest factors that will decide its success or failure in the long run. Don’t forget, it’s advertising that made the most hated car in Germany, a craze in the US. Being pushed as the “people’s car” by Hitler in Germany associated strong negative connotations that lasted more than half a century, while it became iconic and the Love Bug, the Herbie of America. It’s advertising that made this ugly duckling survive, even after being pitted against sleek compact Japanese, European & American cars.

You need to associate your car with the right emotions, the right sentiments. Whatever era, whatever generations, advertising has built and will continue to build brands – right from the Bug to the Nano.

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